April 2011

Business Units

Bioenergy

General News

The United States Environment Protection Agency (EPA) approves E15 for use in most passenger vehicles

Approval of 15 % ethanol blends (E15) in light-duty vehicles manufactured as of from year 2001

E15 distribution

This approval, on January 21, 2011, supplements earlier approval by the EPA, dated October 2010, on the use of E15 in vehicles manufactured as of from 2007. EPA delayed its E15 approval for older vehicles in order to complete testing and confirm that the use of E15 created no serious adverse effects on either the vehicles or the environment.

Previously, approved blends of ethanol and gasoline in the US were limited to:

  1. E85 (up to 85 % ethanol), which is approved for use only in designated Flex Fuel Vehicles (FFVs) and is not yet widely available, and
  2. E10 (gasoline blends containing up to 10 % ethanol), approved for virtually all light duty vehicles for over 30 years.

This decision will allow a third level of ethanol blending in most motor vehicles, opening up significant additional ethanol markets. For now, E15 has been designated as an approved fuel for:

  • Flexible-fuel vehicles (FFVs).
  • Model Year 2001 and newer cars.
  • Model Year 2001 and newer light-duty trucks.
  • Model Year 2001 and newer mediumduty passenger vehicles (SUVs).

This approval of E15 will apply to over 50 % of all light duty vehicles currently on the roads. The approved model years are estimated to consume approximately twothirds of the total amount of fuel consumed by all light duty vehicles. Some final regulatory issues must be resolved to fully enable E15 use throughout the country, but this approval is a major step for the ethanol industry in creating a market beyond 10 % blends.

United States Congress extends ethanol tax incentive

On December 17, 2010, U.S. President Obama signed into law the extension of the ethanol blender’s credit for 2011

President Obama signs the extension of the VEETC into law

This tax credit, known as the Volumetric Ethanol Excise Tax Credit, or VEETC, is the primary federal tax incentive encouraging the use of ethanol, providing blenders and marketers of fuel with a federal tax credit of 45 cents on each gallon (approximately 3.785 liter) of ethanol blended with their gasoline. VEETC enhances the sustained, cost competitiveness of ethanol with gasoline, and provides long-term protection against a volatile petroleum fuel market.

Together with the Renewable Fuel Standard, which requires increasing amounts of biofuel to be blended into the nation’s existing transportation fuel supply, VEETC helps ensure that the goals of energy security and job creation are met with the production of clean, renewable, home grown alternatives to foreign oil. While the Renewable Fuel Standard requires the use and consumption of ethanol by mandating certain volumes be blended into the fuel supply, VEETC ensures that those volumes are met with domestically produced ethanol, rather than imported ethanol. By ensuring that U.S. ethanol is used to satisfy the volumes mandated by RFS, VEETC allows our nation to achieve the intended goals of energy independence and domestic economic development.

While no legislation is universally supported, extension of the ethanol blender’s tax credit did enjoy strong bipartisan support from both Democratic and Republican members of Congress.

Due to the fact that all ethanol is eligible for the credit, a secondary tariff currently set at 54 cents per gallon is imposed on imported ethanol. Both the credit and the tariff are now set to expire on December 31, 2011.

Abengoa Bioenergy opens two new ethanol facilities in the United States

In Mt. Vernon (Indiana) and in Madison (Illinois)

The CEO of Abengoa Bioenergy, Javier Salgado, and US Congressman Brad Ellsworth, at the Indiana grand opening

In October 2010, the two newest Abengoa Bioenergy biorefineries, in Indiana and Illinois, respectively, were brought into operation. They were constructed by Abener Engineering and Construction Services, a sister company of Abengoa, specialized in industrial engineering and construction projects.

Each plant has a production capacity of 90 Mgal gallons (one gallon, approximately 3.785 L) of ethanol annually, as well as 300,000 t per year of high protein distillers grains feed products which will be shipped throughout the country via rail, truck, and water (through the facilities’ access to the Ohio and Mississippi rivers, respectively). Water access provides both facilities with alternative low cost routes to new and existing markets for both the ethanol and feed products produced. As part of the production process, each facility will purchase 32 M bushels of grain each year, primarily from local sources and will provide approximately 60 quality local jobs at the site.

The CEO of Abengoa Bioenergy, Javier Salgado, and US Congressman Jerry Costello, at the Illinois grand opening

The opening of the Mt. Vernon facility was attended by Indiana’s US Congressman Brad Ellsworth, and Illinois’ US Congressman Jerry Costello, attended the opening of the Madison facility. Both acknowledged the importance of each new facility’s economic contribution to the local area, the state, and the entire country.

 

 

 

 

Portales bioethanol plant, in New Mexico (US), resumes activity

The current conditions of the biofuels market have led to this decision

Abengoa Bioenergy has resumed activity at its bioethanol plant in Portales, New Mexico, as a consequence of favorable market conditions, endorsed by an increasingly more positive scenario as regards current legislation and the actions of the administration in relation to ethanol.

This plant, designed to produce up to 113.4 ML/year of bioethanol (30 Mgal), uses sorghum as feedstock, a cereal cultivated in Roosevelt county and other nearby regions. The resumption of activity has generated 40 jobs in the area.

Portales, in Nuevo Mexico (United States)

The bioethanol produced at this plant is expected to be of higher value than that produced at other facilities from the same feedstock due to the provisions of the Security and Energy Investments Act and the Low-Carbon Fuel Standard.

The restart of the plant has also been supported by the political leaders of New Mexico as it boosts the region’s economy and creates new jobs.

The Government of Uruguay visits the plant in Babilafuente

The delegation was led by the Minister for Energy and Mining, and by the President of ANCAP

Members of the Uruguayan Government visited the bioethanol production plant in Babilafuente (Salamanca). The event was the final touch to a series of earlier visits by representatives of Alcoholes de Uruguay (ALUR) and its parent Administración Nacional de Combustibles, Alcohol y Portland (ANCAP), within the framework of the meetings held to evaluate the possibility of constructing a forest biomass bioethanol and cogeneration plant in Uruguay.

The presence of the head of ANCAP, Raul Sendic, together with the country’s Minister for Energy and Mining, Roberto Kreimerman, is a clear demonstration of the interest the project has aroused in the institutions and of the consideration of Abengoa as a possible strategic partner for its construction.

Biocarburantes Castilla y Leon plant

The Uruguayan delegation showed special interest in development of a sustainable agricultural model capable of integrating the nation’s agricultural and energy strategies with the possibility of overlapping increase of the percentage use of biofuels in the national fuel mix. In this respect, attention focused on the flexibility of Abengoa Bioenergy plants, which allow the use of different feedstock and alternation of winter and summer crops. To this end, the Salamanca plant has been alternating corn and barley for the past two years.

Abengoa vehicles use certified second generation bioethanol

E85 second generation bioethanol

The Abengoa Bioenergy fleet uses second generation ethanol

Abengoa’s fleet of vehicles consumes a fuel comprising 85 % certified second generation bioethanol produced by the company itself, and 15 % lead-free gasoline.

The second generation bioethanol is produced from lignocellulosic biomass, wheat straw in this case, processed at the demonstration plant Abengoa has, since 2009, in the municipality of Babilafuente, Salamanca. Abengoa Bioenergy New Technologies is developing this technology for subsequent implementation at commercial scale. The biomass plant in Salamanca is the world’s largest second generation plant, positioning Abengoa as leader in this technology.

Second generation bioethanol reduces greenhouse gas emissions significantly. The production technology used – enzymatic hydrolysis – is the most cutting-edge technological solution available at present.

The bioethanol used in Abengoa vehicles is origin certified, assuring biomass is utilized in its production.

Innovation

The RED Bioenergy Sustainability Assurance Scheme standard

Abengoa Bioenergy has already completed the first training workshop on the RBSA standard

Abengoa Bioenergy has developed a sustainability certification standard known as the RED Bioenergy Sustainability Assurance Scheme, which establishes requirements to meet the criteria of the Renewable Energy Directive 2009/28/EC (RED) throughout the entire chain of supply, from agricultural production to the end user, in a global geographic environment.

The RBSA standard, currently pending approval by the European Commission, is an ideal tool for placing value on the initiatives Abengoa Bioenergy has been promoting in recent years in the field of sustainability. The standard, which is pioneer in its field and extends beyond mere compliance with regulations, includes all the prescriptions required to ensure that all economic operators associated with the production of biofuels can:

  1. Verify that their feedstock production areas are not located in high biodiversity or carbon stock areas.
  2. Check that the biofuel, once commercialized, results in a saving in greenhouse gas (GHG) emissions in excess of the thresholds established in the RED – this saving is calculated by Analysis of the Life Cycle versus the replaced fossil fuel.
  3. Provide information related with the biofuel produced that can be traced to the feedstock from which it originated, by means of a Mass Balance System.

The requirements must be verified by independent audit, so all agents operating under the RBSA standard will be subject to external control by certifying agencies duly accredited under the most stringent standards prior to their participation in the program. Among other aspects, the RBSA demands accreditation under the ISO 65 standard for certification of the product and auditing pursuant to the guidelines of the ISO 1911 standard.

Control Union auditors and Abengoa Bioenergy staff following the first training workshop

The approval as well as control and monitoring of the activities of the certifying agencies will be conducted by an expert committee constituted for this purpose by members of Abengoa with experience in biomass sustainability, management systems, auditing and corporate social responsibility, among others. The criteria for assessment of the suitability of applicant agencies will analyze their prestige, independence, technical capacity, global geographical coverage and experience in similar programs, and it will also be mandatory for them to have a specific RBSA standard quality manual that allows them to integrate the operational systems in this program into their accredited procedures. In order to enable their development and achieve proper and consistent interpretation of the criteria of the standard, the program makes attendance at training sessions compulsory for the RBSA coordinator and auditors appointed by the certifying agencies.

As a consequence of the above, and given their interest in incorporating the RBSA standard into their activity portfolio, Abengoa Bioenergy organized its first RBSA standard training workshop towards the end of last January for auditors of Control Union Certifications, at its headquarters in Zwolle (Holland). The workshop, which lasted a full day, was attended by several leading auditors from Spain, Holland, France and Brazil.

In addition to Control Union Certifications, which is pending formalization of administrative aspects for its final configuration as an authorized certifying agency under the RBSA standard, other certifying agencies have also indicated their interest in initiating this process.

The RBSA standard is at the final stage of technical approval by the DG ENER (the European Commission agency responsible for the same), following which the comitology process would commence in the European Parliament, and this would finalize with formal approval of the standard to all legal effects and purposes.